New Orleans   

Ron Lieber of the Times offered a helpful analysis of Orman’s new entry into this market and its impact on citizen wealth, but despite the fact that he seems to be bending over backwards, “vaporware,” as he calls the claim that credit giant TransUnion will actually use this data to qualify a customer for a real credit card, still seems to be the wrapping for this whole card.  A prepaid card is exactly that, a card where one a customer turns over cash in order to spend that cash with plastic rather than cash.  There have to be very good reasons for doing that, because, cash involves no extra fees, and these celebrity cards still cost money for questionable returns in a market that makes no sense unless it repairs credit or qualifies the consumer for something bigger and better.

Back with ACORN our team met extensively with Russell Simmons about his Rush Card.  We loved Russell and he had been a great friend, especially to New York ACORN, but the rap master had produced a rip card.  Promises were made and improvements were implemented, but the card still sucked, and it’s still sold in low-and-moderate income neighbors everywhere.

Orman will be moving on some other streets but it’s the same hustle it looks like to me with regular maintenance fees and transaction fees, even though there are ceilings that prevent going past the limits and some credit reports and credit reviews even though it is sound and fury signifying nothing.

If the point is something more than making money for Orman and friends, then what is the point of this for consumers.

None that I can find, and until then, if you have a little bit of cash, keep it in your pocket, rather than paying someone else to spend it for you.

New Orleans              

In the current fight in New York City an oft cited study that buttresses the case for coupling public investment in private development with living wage improvements on such projects was written by T. William Lester and our old friend and comrade, Ken Jacobs from the University of California at Berkeley’s Center for Labor Research and Education.  The study, “Creating Good Jobs in Our Communities:  How Higher Wage Standards Affect Economic Development and Employment,” put together a list of cities that had enacted “business assistance living wage” ordinances and created a database to compare them to a similar set of cities to determine in a unique way whether or not cities had hurt their growth and job development with such policy initiatives.  The cities  had a good dose of California in them, not surprisingly, but also included a good smattering from around the rest of the country, making the work truly national in scope.

The results contained good news for all of us who have advocated and organized for such policies to be enacted in our cities:

“Economic development wage standards are one tool that a city can use to create jobs of greater quality. We have compared two sets of cities in order to assess the effectiveness of such laws—those with enforced business assistance living wage laws and those without—and found that there is no loss in the number of jobs due to the living wage requirement. It appears that, even during hard times, economic development wage standards are an effective tool for increasing wages in a city without sacrificing the number of jobs.”

This work builds on the path breaking work done by Dr. Robert Pollin of the University of Massachusetts at Amherst that had established in Los Angeles and later, working with ACORN in both New Orleans and Florida, that the any adverse impacts were at worst negligible, and at best wildly positive.  Walmart ran from ACORN’s big-box proposed ordinance in Chicago in 2006 which would have coupled business assistance with their development and pulled up stakes in Sarasota, Florida when we won an ordinance requiring living wages on such developments in that city, but these studies seem to conclusively argue that they simply left money on the table, rather than allowing cities to develop in equitable and sustainable fashion.

With the first hints emerging that we may be coming out of the recession, we need to dust off all of these reports and initiatives and move more aggressively to reassert these agendas in North American cities and around the

A pretty good example can be found in the piece on Power in the Movement by Alex C.  The graphic gives a clear image below:

 The piece though is a little harder to put your arms around.   First, Alex argues that “we must shed the invincibility complex.”  Since he’s arguing that we must admit the ability to err, that seems beyond dispute, though perhaps unusual that it is the first consideration in looking at power within a movement.  The second point went like this:

Second, a thought model may come in handy. We can view

the goal of social justice as necessarily passing through a

Feng Shui of Power with flows shaped by human action and

intentionality. With this paradigm we can proactively push

the movement to a place where all feel empowered and not

left out. Concretely, radicals must make use of “tracing”—

i.e. recognizing power and tracing it back to its origins—

to build a cartography of power. With that knowledge we

can actively shape the conditions for it to flow harmoniously

throughout all occupiers and society.

I’m not clear reading that piece that I have much of an idea of where to go next in thinking about power within the movement?  Alex then lays out a basic one-two-three on power analysis mapping research which is once again inarguable.

On the other hand the piece by “Rira” entitled “Matrix as the Core Element” is an excellent analysis of the importance Occupiers ascribe to place and space, the General Assembly (which many in Tidal argue as their primary contribution to movement thinking and work), and other issues.

Enough said.  If you are interested in how the Occupy Movement is beginning to lay down its process and thinking on theory and strategy, “Tidal” is worth a look.  If you can’t find it, send me an email, and I’ll send you a copy of the PDF.

            New Orleans              

Dharmendra Kumar, campaign director of India FDI Watch (www.indiafdiwatch.org), issued a detailed, factual rebuttal to the government’s claims, which clarifies the issues:

The Issue of FDI in Retail

The report, “Unfair Fairtrade,” was released yesterday on the ACORN International website (www.acorninternational.org) and asks some tough questions about the contradictions and inconsistencies involved in the Fairtrade organization.  The mission and purpose of Fairtrade were exemplary.  Founders came together to unite cooperatives of developing world producers in a process that would yield them a better market price for their crops by allowing consumers to know that common standards and guarantees existed.

Over the years though the costs have grown and in many cases neither consumers nor producers seem to have ended up where either one of them hoped to be in these transactions.  ACORN International in a meeting last summer with the best of the national Fairtrade affiliates in Canada found that our own partners, COMUCAP, both could become the first or one of the first aloe vera certified organizations and were somehow suspended.  In the burgeoning bureaucracy that many now believe characterizes, the Fairtrade organization, even with the intervention of our Canadian friends, COMUCAP has been stuck in this stalemate status, likely because of delay in paying the significant fees required to maintain their status.  Is their coffee somehow less fair trade now?  Less organic?  Are the members of the cooperative less dependent on the sales through COMUCAP?  The answer is “no,” to all of those questions, but stuck they remain.  Our research found that they are not alone, and in fact this is a common problem.

The longstanding controversy perhaps best demonstrated by the USA affiliate has now boiled over with the USA outfit leaving the Fairtrade “club.”  And, not necessarily for good reasons!  The USA group had already been seen as somewhat rouge, because of the fair trade green-washing they had been willing to give to various big coffee outlets in order to increase market share (which helps their bottom line) even when the impact in the fields was marginal or worse.  It is no wonder that Rainforest Action Network, Starbucks, Green Mountain Coffee, and others have simply created their own “brands” for fair trade, further muddling the market and confusing consumers.

None of this is good and all of it should raise red flags in the progressive community and among consumers.  ACORN International affiliates in our dozen countries and our partners are right in the thick of this, so we once again are asking the hard questions of some sacred cows in hopes that we can help trigger a dialogue that finally achieves the great mission of these organizations and fair trade and brings us back on track.

            New Orleans              

            Unfortunately even as I signed up for a new account, the bloom was falling off the rose. 

            My friends at the credit union tried to sign me up for overdraft protection, even as I opened the account, which is pretty widely viewed as a sketchy, overpriced financial product.  The overdraft fees pushed $30, just like the big banks, which is also a no-no.  Worse the maintenance fees for a checking account were all pretty much more expensive than other big area and national banks at $10 per month under $300 or so and $8 under $500.  To escape monthly fees we credit union backers would have to maintain a $500 minimum balance.  The ATM’s were cheaper and there was no plan to fleece consumers there, but access was not easy and the hours were less than 24/7, which many folks want these days.  My sales pitch when I returned to the office was falling flatter than any pancakes.

I wasn’t quite able to hold my tongue when they explained that they might hold a check for up to 11 days, which was ridiculous, and seemed to be courting more payment of those overdraft fees.  My hopes that they might be able to handle some our organizational accounts were dashed right there on that item alone.  Wire transfers also looked prohibitive. 

At least credit unions always had the reputation for doing better on savings, but there the offer currently was .0025% (one-quarter of one percent).   It certainly was easy to open an account for almost nothing down, which put them at a huge advantage over other financial institutions, though I left scratching my head as I read the fee chart about how long those accounts could last with $10 per month monthly maintenance charges. 

To create more community and citizen wealth we need more competitiveness and sustainability.  I couldn’t even see evidence of “lifeline” accounts which might be all on-line and all-ATM based, thereby limiting costs for the institution and still allowing the consumer to be banked rather than unbanked.

All of this made it painful for me to read the article in the Times trumpeting how our buddies at Wal-Mart are benefiting from the financial crisis and the progressive push against banks.  Working families are increasingly using their cheaper check cashing and card loading products as faux-banks rather than maintaining accounts. 

To successfully build alternative and effective financial capacity for low-and-moderate income families, we need institutions that are committed to being different, embracing the cooperative and community vision, and are willing and able to embrace the needs of the community and respond to them.  Hopefully, the movement into credit unions will force them to rethink how they assess their role as competitors for these customers in the market, rather than simply being “big-bank-lite” and only different by a matter of small degrees rather than huge distinctions.

New Orleans

The arguments were clear and concise from Goodman:

• Of 55 million mortgages more than 10 million she reckons are likely to default, largely because they are underwater…in other words the borrower owes more than the current value of the property.
• Supply is going to “outstrip demand.”  Goodman estimates a glut as high as 6.2 million properties over the next 6 years, largely because the economy (add changing social mores in my view) are slowing “household formation.”  Young people without jobs are not making commitments backed by real estate.
• She argues that only principal reduction can save the market because, as we have argued, “A borrower will make a decision to default if it is in his or her best interest.”  Hello!

Line forms in the rear, but let’s move it along before another million or two lose their homes!

New Orleans

The Times post-mortem for the business readers continued with their usual theme of trying to manage protest by promoting social media (remember Egypt which they immediately had to retract with the “real” story?) as the “organizing tool” for change with the enthusiastic, over-the-top help of www.change.org, which is a great outfit, but seems to have had no boundaries in their personal congratulations on this one.

“But those customers may have found their voice, which has been amplified by social media. “People can now use tools like Change.org, Facebook and Twitter to rapidly organize and collectively act to influence the policies of even the largest companies,” said Ben Rattray, founder of Change.org, which allows consumers to start grass-roots campaigns using its online platform.

He pointed to Molly Katchpole, a 22-year-old woman from Washington who collected more than 300,000 signatures opposing the fee by using his company’s platform. And then there is the grass-roots effort that is calling for this coming Saturday to be “Bank Transfer Day,” where customers of big banks move their accounts to community banks and credit unions.

Mr. Rattray and other consumer advocates said the outcry was about much more than fees. “Bank of America’s new debit card fee was the last straw for many consumers who are tired of banks that got bailed out that are now turning around and hiking fees,” said Norma Garcia, manager of Consumer Union’s financial services program. “There was this phenomenon with banks and others confusing passivity with loyalty. And consumers are saying, ‘You can’t take us for granted anymore.’ ”

To be fair the “powers that be” want to make sure that protest continues to operate between the straight lines, so ample praise of course in the same piece by Tara Bernard (http://www.nytimes.com/2011/11/02/business/bank-of-america-drops-plan-for-debit-card-fee.html?scp=1&sq=social%20media%20and%20bank%20fees&st=cse) :

Lawmakers also openly criticized Bank of America’s planned fee. Days after the bank announced that it would charge the fee, President Obama said customers should not be “mistreated” in pursuit of profit, while Vice President Joseph R. Biden Jr. called the move “incredibly tone deaf.” And Senator Richard J. Durbin of Illinois, the No. 2 Senate Democrat, spoke out on the Senate floor, urging consumers to vote with their feet. He had sponsored the rule, known as the Durbin amendment, that limited the amount banks could charge for debit card transactions.

On Tuesday, he took to the floor again. “What we have at work here is a very fundamental principle of our economy, the free market economy, transparency,” he said. “So people know what they are being charged. So they have a choice.””

But, speaking of “tone deaf,” how is it possible not to mention the daily protests around the country and the world around banks and the admitted traction that Occupy has picked up in hitting Bank of America hard where previous large protests by community organization networks and unions had failed to gain traction?

I don’t mind being manipulated by the media anymore than the next person, but, gee, can’t they be a little more slick about it?  I know we are not supposed to believe that direct action, social movements, and mass protests make a difference as we parse the new tools that focus on a “theory of change,” but it takes people to use tools, and when the people are in motion, as they are now, let’s at least be clear about stating the obvious no matter how much credit some might want to claim or how much others might want to deny.

Orleans

As we have discussed earlier, lawyers who have successfully litigated with these outfits have called this nothing but grant larceny.  I had the discussion with my banker at Capital One who could only rationalize that it was being considered because “they had to raise money somewhere.” We all know that the defense that “you needed the money” is both the truest and least effective response any criminal can make.

The Times did a sad service with a front page article on the shrewd calculations that Bank of America and its colleagues have made by pushing direct and automatic payments for customers to their regular vendors from utilities to credit card companies to home mortgages and back again.  The story was an easy reminder for readers both how easy it is to sign up for such payments and how hard it is to unravel them to the degree you become welded to your bank regardless of the outrageous charges and abuse.   We are near the point where we are going to need to demand an easier “exit” policy from our banks, just as we had to achieve with our cell phone companies around keeping our phone numbers in recent years.  The little things can kill you!

Even though Occupy has not been successful in seeing any traction on the urgent “Geithner Must Go!” campaign to hold him responsible for some much of the Wall Street pandering and pampering he led first as the critically important head of the New York Federal Reserve Bank, the storm may finally be coming on the horizon.  Amazingly a story in today’s Times documents the giveaway with AIG where banks were paid in full from the federal coffers and were not asked to take any haircut, but in face were even required to shave.  Even banks that offered to take less that they were owed were informed by Geithner’s Fed, since he was head at the time, that they would be paid in full.

At least Geithner, now at Treasuery, with Ben Bernacke at the Federal Reserve are having to line up to finally provide some regulation for non-bank banks in recent hearings in the wake of Occupy.  Of course it is not enough, but even bringing 30 financial institutions like Mass Mutual, Zurich, some hedge funds and outfits like Blackrock and others under regulation because they control over $50 Billion in assets is something.  The Financial Stability Oversight Council still has to wait for comments so the lobbyists will be feeding at the trough, but at least now they need to realize that they might have to reckon with real, immediate, and potentially powerful political outrage if the boys give yet another break to the bankers.

New Orleans

The Times described the program as follows:

“…expand the existing income-based repayment program with a “Pay as You Earn” option that would allow graduates to pay 10 percent of their discretionary income for 20 years and have the rest of their federal student loan debt forgiven. That plan would start next year.

Most of the 450,000 low-income student-loan borrowers currently enrolled in income-based payment must pay 15 percent of their discretionary income for 25 years before having their debt forgiven, although terms are easier for those in public service.

Perhaps as interesting is the fact that the Times also gave some credit for the small win to the Occupy Wall Street forces, partially because this has been a subject of many signs in the encampments and shortlisted on many of the demand sheets.  The communications folks for the White House also “explained” the move to this program citing 30,000 signatures on a petition on the White House website.

This is more interesting to me than the increase in many ways.  The Obama Administration seems to be lighting up a neon sign on Pennsylvania Avenue that says, “build a movement, and we will cave!”  Love that!!!  They seem to be signaling (once again, because I believe they have been doing this for 3 years!), that if you hit them, you will win.

Sounds like a sign.  Seems like a plan!